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You are here: Home / Radio / What Bauer’s recent radio acquisitions mean for brands

What Bauer’s recent radio acquisitions mean for brands

23rd April 2020 by Helen Gray

In a break from all the COVID-19 pandemic news, it was announced last week that the ‘hold separate’ order issued last year by the Competitions and Markets Authority (CMA) on Bauer’s acquisition of around 50 radio station licenses had been lifted. The order was actually issued a month after the CMA cleared the purchases subject to remedies, and relates to their acquisition of the likes of Lincs FM Group, Celador Radio, UKRD and the Wireless local division.

What’s does this mean for Bauer and First Radio sales?

  • Bauer can now start to make changes to these stations and begin the integration process.
  • The acquisition means that Bauer controls 50% of FRS, which had led to competition concerns about the future viability of the sales house.
  • CMA: “If FRS were to shut down, independent local radio stations would have only 2 options for sales representation: Bauer or Global (the largest commercial radio group in the UK). This would leave stations with insufficient choice when trying to sell national radio advertising airtime and potentially lead to them paying higher commission rates.”
  • Bauer will be required to provide advertising representation to independent radio stations, on the same terms as the stations were receiving from FRS, for 10 years.

What does this mean for clients?
We are still in the very early stages of these changes; Bauer has only just been permitted to start conversations and integration with their newly acquired stations. it could still be at least another 6 months before we start to see changes in the way these stations are traded, especially given the current situation with COVID-19 which is having a significant impact on the market.

It is also very likely that this will mean the end of FRS, certainly in its current form. As part of the ruling by the CMA, Bauer has had to agree to provide national representation to the other independent stations not being bought – although it is likely these will have to be kept and traded separately from their owned stations.

The average cost per thousands (CPT’s) across First Radio sales are lower than that on Bauer. It’s not known yet how Bauer will re-brand or trade these new stations, although less salespoints will reduce the negotiation power. If FRS does close, the ‘big two’ (Global and Bauer) would control more than 85% of the commercial radio market.

One of the other interesting changes would be the shift between Global and Bauer, with the difference in market share narrowing: currently 45% for Global vs 32% for Bauer. With the addition of the newly acquired stations, Bauer may have a much stronger macro presence in some areas, whereas previously it may have needed both Global and Bauer to cover a macro. This poses a similar problem for the remaining FRS stations, with the greatest economy being to buy them at macro level rather than station level. With these newly formed holes in their macros, will the remaining stations still have the same place on larger macro and national plans if they have to be bought at individual local station level and a higher price?

For the time being however it’s business as usual – as usual as things can be while in the middle of a global pandemic!

Read more information on our radio services.

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